As the sun reemerges after the haze of June, the mercury creeps up, people retreat into air-conditioned offices and shaded patios, and everything seems to slow down in the summer heat, the lateral market included. Or at least, this has been the perception of the lateral market, but legal recruiters know there is really no off-season for the associate churn. There really isn’t a pronounced seasonality to the legal recruiting market, with the exception of December. December is the one month when associates and partners stay put to collect their bonuses before moving on to greener pastures.
Even so, the fourth quarter as a whole is hardly a slouch. Since 2010, 22% of lateral moves have been consummated in the fourth quarter of the year. Comparatively, the first quarter, which is often lauded as the most active, played host to 23% of all lateral moves — just 4.5% greater than the fourth.
Last year, lateral associate recruiting actually trended upwards through the calendar year, instead of dropping precipitously as most thought it would in the waning months of 2014. The fourth quarter of 2014 witnessed the second-highest volume of lateral moves of the year.
As it turns out, associates may have one more gripe with partners, who are typically immobile at the end of the year as they are waiting on year-end distributions. Partner bonuses alone can often equal or surpass their base draw or salary, which makes year-end a very difficult time for most partners to digest a lateral move.
The middle two quarters host the most lateral activity, and the months of June and July are generally the most active, which seems counterintuitive until you look at our legal recruiting statistics for the lateral market. This trend is no coincidence and is caused by a confluence of factors. Among them are bonus payouts. Some firms don’t actually pay their bonuses until mid to late January, making associates potentially wait a couple extra months before finally pulling the trigger on a lateral transition. Firms may also no-offer or rescind offers to 2Ls and 3Ls, potentially opening up new positions for junior lateral associates. More importantly, most partner promotions are realized in the first quarter.
Over 72% of partner promotions in the last year were in the first quarter. Most firms promote attorneys in one block, meaning if you miss out, it’s a long wait until next year’s opportunity for promotion. However, most attorneys who are denied partnership are leery of their chances, and will seek out a lateral destination that will promise a partnership title either as part of the lateral move, or after a certain period of time — usually two years until the next promotional period.
The summer is actually an especially good time for senior associates to start the lateral recruitment process. The exodus out of the Biglaw market into other avenues — such as in-house, government, boutiques, and non-law positions — is less pronounced than it was in recent years. The gap between those lateraling and those lateraling out of Biglaw is narrowing. In recessionary times, some 80% of moves were attorneys leaving Biglaw altogether because of RIFS given lack of work. Recently, that number has dropped just below 50%.
For more junior associates, the summer is also a great time to “start” a lateral search given the time it takes to complete one, i.e., submission, interview, offers, negotiation, acceptance, and finally start. Most Decembers — aside from the last — are slightly less competitive respective to the rest of the year, as firms are busy integrating their first years, finishing year-end bookkeeping, and preparing for the onslaught of work that accompanies the New Year. Many unfilled positions float past July into the later months, and are excellent opportunities for associates to try to grab an offer from a “reach” firm.
Every season presents its own unique advantages and disadvantages in the lateral market. If you are unhappy with your firm, the best time to lateral is really at the point you made up your mind that you would like to explore other options. If summer comes and you are worried you waited too long to lateral, the truth is, a good lawyer will always find a good home, especially when working with the right recruiter. If you are worried about forgoing your bonus by lateraling too late, we often negotiate with firms so that you won’t leave your bonus on the table. So enjoy the sunshine and the heat, and if you desire a change of scenery, pick up the phone and let us help you make an informed lateral move.